84374 Federal Register / Vol. 88, No. 232 / Tuesday, December 5, 2023 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The term ‘‘Market Makers’’ refers to ‘‘Lead 

Market Makers’’, ‘‘Primary Lead Market Makers’’ 

and ‘‘Registered Market Makers’’ collectively. See 

Exchange Rule 100. 

4See SR–MIAX–2021–45. 

5See MIAX Options Regulatory Circular 2021–56, 

SPIKES Options Market Maker Incentive Program 

(September 30, 2021) available at https://

www.miaxglobal.com/sites/default/files/circularfiles/MIAX_Options_RC_2021_56.pdf. 

6See Securities Exchange Act Release No. 93424 

(October 26, 2021), 86 FR 60322 (November 1, 2021) 

(SR–MIAX–2021–49). 

7See id. 

8See Securities Exchange Act Release Nos. 93881 

(December 30, 2021), 87 FR 517 (January 5, 2022) 

(SR–MIAX–2021–63); 94574 (April 1, 2022), 87 FR 

20492 (April 7, 2022) (SR–MIAX–2022–12); 95259 

(July 12, 2022), 87 FR 42754 (July 17, 2022) (SR– 

MIAX–2022–24); 96007 (October 7, 2022), 87 FR 

62151 (October 13, 2022) (SR–MIAX–2022–32); 

96588 (December 28, 2022), 88 FR 381 (January 4, 

2023) (SR–MIAX–2022–47); 97239 (April 3, 2023), 

88 FR 20930 (April 7, 2023) (SR–MIAX–2023–13); 

and 97883 (July 12, 2023), 88 FR 45941 (July 18, 

2023) (SR–MIAX–2023–26). 

9See id. 

10The Exchange notes that at the end of the 

extension period, the Incentive Program will expire 

unless the Exchange files another 19b–4 Filing to 

amend the terms or extend the Incentive Program. 

11See supra note 5. 

12See id. 

13See id. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99040; File No. SR–MIAX– 

2023–47] 

Self-Regulatory Organizations; Miami 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Its Fee Schedule 

November 29, 2023. 

Pursuant to the provisions of section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on November 20, 2023, Miami 

International Securities Exchange, LLC 

(‘‘MIAX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

MIAX Options Exchange Fee Schedule 

(the ‘‘Fee Schedule’’) to extend the 

SPIKES Options Market Maker Incentive 

Program (the ‘‘Incentive Program’’) until 

March 31, 2024. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://www.miaxglobal.com/markets/ 

us-options/miax-options/rule-filings, at 

MIAX’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule to extend the Incentive 

Program until March 31, 2024. 

On September 30, 2021, the Exchange 

filed its initial proposal to implement a 

SPIKES Options Market Maker Incentive 

Program for SPIKES options to 

incentivize Market Makers 3 to improve 

liquidity, available volume, and the 

quote spread width of SPIKES options 

beginning October 1, 2021, and ending 

December 31, 2021.4 Technical details 

regarding the Incentive Program were 

published in a Regulatory Circular on 

September 30, 2021.5 On October 12, 

2021, the Exchange withdrew SR– 

MIAX–2021–45 and refiled its proposal 

to implement the Incentive Program to 

provide additional details.6 In that 

filing, the Exchange specifically noted 

that the Incentive Program would expire 

at the end of the period (December 31, 

2021) unless the Exchange filed another 

19b–4 Filing to amend the fees (or 

extend the Incentive Program).7

Between December 23, 2021, and July 

12, 2023, the Exchange filed several 

proposals to extend the Incentive 

Program, with the last extension period 

ending December 31, 2023.8 In each of 

those filings, the Exchange specifically 

noted that the Incentive Program would 

expire at the end of the then-current 

period unless the Exchange filed 

another 19b–4 Filing to amend the fees 

(or extend the Incentive Program).9

The Exchange now proposes to extend 

the Incentive Program until March 31, 

2024.10

The Exchange proposes to extend the 

Incentive Program for SPIKES options to 

continue to incentivize Market Makers 

to improve liquidity, available volume, 

and the quote spread width of SPIKES 

options. Currently, to be eligible to 

participate in the Incentive Program, a 

Market Maker must meet certain 

minimum requirements related to quote 

spread width in certain in-the-money 

(ITM) and out-of-the-money (OTM) 

options as determined by the Exchange 

and communicated to Members via 

Regulatory Circular.11 Market Makers 

must also satisfy a minimum time in the 

market in the front 2 expiry months of 

70%, and have an average quote size of 

25 contracts. The Exchange established 

two separate incentive compensation 

pools that are used to compensate 

Market Makers that satisfy the criteria 

pursuant to the Incentive Program. 

The first pool (Incentive 1) has a total 

amount of $40,000 per month, which is 

allocated to Market Makers that meet 

the minimum requirements of the 

Incentive Program. Market Makers are 

required to meet minimum spread 

width requirements in a select number 

of ITM and OTM SPIKES option 

contracts as determined by the 

Exchange and communicated to 

Members via Regulatory Circular.12 A 

complete description of how the 

Exchange calculates the minimum 

spread width requirements in ITM and 

OTM SPIKES options can be found in 

the published Regulatory Circular.13

Market Makers are also required to 

maintain the minimum spread width, 

described above, for at least 70% of the 

time in the front two (2) SPIKES options 

contract expiry months and maintain an 

average quote size of at least 25 SPIKES 

options contracts. The amount available 

to each individual Market Maker is 

capped at $10,000 per month for 

satisfying the minimum requirements of 

the Incentive Program. In the event that 

more than four Market Makers meet the 

requirements of the Incentive Program, 

each qualifying Market Maker is entitled 

to receive a pro-rated share of the 

$40,000 monthly compensation pool 

dependent upon the number of 

qualifying Market Makers in that 

particular month. 

The second pool (Incentive 2 Pool) is 

capped at a total amount of $100,000 


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Federal Register / Vol. 88, No. 232 / Tuesday, December 5, 2023 / Notices 84375 

14See id. 

15See id. 

16See id. 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(4) and (5). 

19 15 U.S.C. 78s(b)(3)(A)(ii). 

20 17 CFR 240.19b–4(f)(2). 

per month which is used during the 

Incentive Program to further incentivize 

Market Makers who meet or exceed the 

requirements of Incentive 1 (‘‘qualifying 

Market Makers’’) to provide tighter 

quote width spreads. The Exchange 

ranks each qualifying Market Maker’s 

quote width spread relative to each 

other qualifying Market Maker’s quote 

width spread. Market Makers with 

tighter spreads in certain strikes, as 

determined by the Exchange and 

communicated to Members via 

Regulatory Circular,14 are eligible to 

receive a pro-rated share of the 

compensation pool as calculated by the 

Exchange and communicated to 

Members via Regulatory Circular,15 not 

to exceed $25,000 per Member per 

month. Qualifying Market Makers are 

ranked relative to each other based on 

the quality of their spread width (i.e., 

tighter spreads are ranked higher than 

wider spreads) and the Market Maker 

with the best quality spread width 

receives the highest rebate, while other 

eligible qualifying Market Makers 

receive a rebate relative to their quality 

spread width. 

The Exchange proposes to extend the 

Incentive Program until March 31, 2024. 

The Exchange does not propose to make 

any amendments to how it calculates 

any of the incentives provided for in 

Incentive Pools 1 or 2. The details of the 

Incentive Program can continue to be 

found in the Regulatory Circular that 

was published on September 30, 2021, 

to all Exchange Members.16 The 

purpose of this extension is to continue 

to incentivize Market Makers to improve 

liquidity, available volume, and the 

quote spread width of SPIKES options. 

The Exchange will announce the 

extension of the Incentive Program to all 

Members via a Regulatory Circular. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with section 6(b) of the Act 17

in general, and furthers the objectives of 

section 6(b)(4) of the Act 18 in particular, 

in that it is an equitable allocation of 

reasonable fees and other charges among 

its members and issuers and other 

persons using its facilities. The 

Exchange also believes the proposal 

furthers the objectives of section 6(b)(5) 

of the Act in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers and dealers. 

The Exchange believes that it is 

reasonable, equitable, and not unfairly 

discriminatory to extend the Incentive 

Program for Market Makers in SPIKES 

options until March 31, 2024. The 

Incentive Program is reasonably 

designed because it will continue to 

incentivize Market Makers to provide 

quotes and increased liquidity in select 

SPIKES options contracts. The Incentive 

Program is reasonable, equitably 

allocated and not unfairly 

discriminatory because all Market 

Makers in SPIKES options may continue 

to qualify for Incentive 1 and Incentive 

2, dependent upon each Market Maker’s 

quoting in SPIKES options in a 

particular month. Additionally, if a 

SPIKES Market Maker does not satisfy 

the requirements of Incentive Pool 1 or 

2, then it simply will not receive the 

rebate offered by the Incentive Program 

for that month. 

The Exchange believes that it is 

reasonable, equitable and not unfairly 

discriminatory to continue to offer this 

financial incentive to SPIKES Market 

Makers because it will continue to 

benefit all market participants trading in 

SPIKES options. SPIKES options is a 

Proprietary Product on the Exchange 

and the continuation of the Incentive 

Program encourages SPIKES Market 

Makers to satisfy a heightened quoting 

standard, average quote size, and time 

in market. A continued increase in 

quoting activity and tighter quotes may 

yield a corresponding increase in order 

flow from other market participants, 

which benefits all investors by 

deepening the Exchange’s liquidity 

pool, potentially providing greater 

execution incentives and opportunities, 

while promoting market transparency 

and improving investor protection. 

The Exchange believes that the 

Incentive Program is equitable and not 

unfairly discriminatory because it will 

continue to promote an increase in 

SPIKES options liquidity, which may 

facilitate tighter spreads and an increase 

in trading opportunities to the benefit of 

all market participants. The Exchange 

believes it is reasonable to operate the 

Incentive Program for a continued 

limited period of time to strengthen 

market quality for all market 

participants. The resulting increased 

volume and liquidity will benefit those 

Members who are eligible to participate 

in the Incentive Program and will also 

continue to benefit those Members who 

are not eligible to participate in the 

Incentive Program by providing more 

trading opportunities and tighter 

spreads. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intra-Market Competition 

The Exchange believes that the 

proposed extension of the Incentive 

Program to March 31, 2024, would 

continue to increase intra-market 

competition by incentivizing Market 

Makers to quote SPIKES options, which 

will continue to enhance the quality of 

quoting and increase the volume of 

contracts available to trade in SPIKES 

options. To the extent that this purpose 

is achieved, all the Exchange’s market 

participants should benefit from the 

improved market liquidity for SPIKES 

options. Enhanced market quality and 

increased transaction volume in SPIKES 

options that results from the anticipated 

increase in Market Maker activity on the 

Exchange will benefit all market 

participants and improve competition 

on the Exchange. 

Inter-Market Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on inter-market competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed extension of the 

Incentive Program applies only to the 

Market Makers in SPIKES Options, 

which are traded exclusively on the 

Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to section 

19(b)(3)(A)(ii) of the Act,19 and Rule 

19b–4(f)(2) 20 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 


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84376 Federal Register / Vol. 88, No. 232 / Tuesday, December 5, 2023 / Notices 

21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3A Standard quote is a quote submitted by a 

Market Maker that cancels and replaces the Market 

Maker’s previous Standard quote, if any. See 

Exchange Rule 517(a)(1). 

4The term ‘‘Market Makers’’ refers to ‘‘Lead 

Market Makers’’, ‘‘Primary Lead Market Makers’’ 

and ‘‘Registered Market Makers’’ collectively. See 

Exchange Rule 100. 

5The term ‘‘bid’’ means a limit order or quote to 

buy one or more option contracts. See Exchange 

Rule 100. 

6The term ‘‘offer’’ means a limit order or quote 

to sell one or more option contracts. See Exchange 

Rule 100. 

7See Exchange Rule 603(a). 

8See Exchange Rule 604(a). 

9See Exchange Rule 604(b). 

10See Exchange Rule 604(c). 

11See supra note 4. 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

MIAX–2023–47 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–MIAX–2023–47. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MIAX–2023–47 and should be 

submitted on or before December 26, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–26595 Filed 12–4–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99041; File No. SR–MIAX– 

2023–45] 

Self-Regulatory Organizations; Miami 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Rule 517, Quote 

Types Defined 

November 29, 2023. 

Pursuant to the provisions of section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on November 16, 2023, Miami 

International Securities Exchange, LLC 

(‘‘MIAX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I and II below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend Exchange Rule 517, Quote Types 

Defined. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://www.miaxglobal.com/markets/ 

us-options/miax-options/rule-filings, at 

MIAX’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 517, Quote Types Defined. 

Specifically, the Exchange proposes to 

adopt new Interpretations and Policies 

.02 to Rule 517 to adopt new risk 

protection behavior for replacement 

Standard quotes 3 that are rejected. 

Background 

Market Makers 4 on the Exchange 

have heightened obligations separate 

from other market participants. 

Transactions of a Market Maker should 

constitute a course of dealings 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market, and Market Makers should not 

make bids 5 or offers 6 or enter into 

transactions that are inconsistent with 

such a course of dealings.7 A quotation 

may only be entered by a Market Maker, 

and only in the options classes to which 

the Market Maker is appointed under 

Rule 602.8 A Market Maker’s bid and 

offer for a series of option contracts 

shall state a price accompanied by the 

number of contracts at that price the 

Market Maker is willing to buy or sell 

upon receipt of an order or upon 

interaction with a quotation entered by 

another Market Maker on the 

Exchange.9 Additionally, a Market 

Maker that enters a bid (offer) on the 

Exchange must enter an offer (bid) 

within the spread allowable under Rule 

603(b)(4).10

The Exchange has three classes of 

Market Makers; Primary Lead Market 

Makers, Lead Market Makers, and 

Registered Market Makers.11 Further, 

each class of Market Maker has its own 


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